Title
The effects of institutional change in European soccer The effects of institutional change in European soccer
Author
Faculty/Department
Faculty of Applied Economics
Publication type
article
Publication
Stuttgart ,
Subject
Sociology
Economics
Mathematics
Source (journal)
Jahrbücher für Nationalökonomie und Statistik. - Stuttgart
Volume/pages
232(2012) :3 , p. 318-335
ISSN
0021-4027
ISI
000304576900009
Carrier
E
Target language
English (eng)
Affiliation
University of Antwerp
Abstract
The last decades have seen two profound changes in European soccer. First, international trade in talent has increased markedly. Second, international competitions such as the Champions League have become much more important. Using a theoretical model, we study how these changes affect competitive balance within national competitions, and quality differences between national competitions. Introducing international trade in talent leads to a flow to large countries, as the returns to talent are higher there. Wages increase in small countries, but decrease in large ones. The wage increase in small countries hurts small teams more than large ones. Therefore, competitive balance decreases. The wage decrease in large countries benefits small teams more, so competitive balance increases. The introduction of a Champions League implies the possibility to win a large amount of prize money. This is relatively more important for small teams. Hence, competitive balance increases in all countries, and talent flows from large to small countries, provided international trade is possible. Wages increase. When looking at both changes combined, we find that talent flows from small to large countries. Hence, in this sense, the trade effect dominates the Champions League effect. Competitive balance increases in all but the very smallest countries.
E-info
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